Extranets

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Extranets
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Extranets

• Extranets are external networks physically set up
  outside a companys firewall that provides
  assistance with business strategy, ordering and
  product-delivery systems and customer support.
• Extranets extend the benefits of particular
  company information to outside groups, such as
  partners, suppliers, and customers without
  compromising on organizations strategy.
• Extranets can be used to exchange large volumes
  of data, share product catalog, share news with
  trading partners, jointly develop and share
  training programs with other companies, and much
  more.
• An extranet is a private network that uses
  internet protocols and the public
  telecommunication system to securely share part
  of a businesss information or operations with
  business partners.
• It can be reached only by a limited number of
  people or entities because the extranet is
  protected by security protocols and various
  authentication methods such as user IDs, and
  password.

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Types of Extranets

• Supplier Extranets A supplier extranet links
  store branches to their central store, in order
  to facilitate workflow and maintain the required
  level of stocks in the inventory. It reduces the
  possibility of rejecting orders due to shortage
  of stocks, in addition to providing many services
  related to inventory control.
• Distributor Extranets A distributor extranet
  gives different levels of authorization to
  various individuals, depending on the size of the
  dealings. It also provides services such as
  electronic order and automated settlements, as
  well as lists of new products and specifications.
• Peer Extranets A peer extranet promotes equal
  competition between the different companies in
  the business sector, as it links small and large
  companies and enables them to share product
  prices and specifications. This helps to improve
  the products and services of a company, and in
  curbing monopoly.

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Advantages

• Lower Cost Of Goods
• Many manual processes, paper and faxes can be
  eliminated
• which can reduce costs dramatically at all levels
  of the supply
• chain.
• Attraction Of More Competitive Bids
• Since purchasing is automated and done via
  extranets many
• companies have attracted more competitive bids
  from a greater
• diversity of suppliers.
• Quicker Time To Market
• Due to efficiencies gained from a more finely
  tuned supply chain, an
• extranet allows for companies to bring new
  products to the market much
• quicker than before. This allows them to gain
  first mover advantage or
• match competitors offerings much quicker.

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Advantages

• More Concise Asset Management
• Companies have more opportunity to more closely
  track orders and
• assets. Customers using an extranet for ordering
  will have an easier
• time reviewing their past purchases.
• Open Standards
• Another advantage of an extranet is the
  internets open standards.
• Companies that purchased their equipment from
  different vendors
• will not be hurt because the extranet eliminates
  many compatibility
• problems.

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Advantages

• Employment Services
• Extranets are used to linked students of
  universities and other
• institutions to the labour force. Both sides
  benefit from this because
• through extranets students will be able to
  communicate with
• employers in the labour market.
• Increased Communication In Workplace
• Employers will be able to quickly share ideas
  and feedback to
• employees in a more quick and efficient manor.
  This will increase
• employee responsibility and therefore moral.

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Disadvantages

• System Vulnerability
• This concerns security and the internet the type
  of data that RD
• will transmit over the extranet (ie. Financial
  Data, Info for New
• products) makes the network very appealing for
  hackers and other
• competitors
• Insufficient Support
• Quality of service is a concern because it is
  difficult to provide
• Adequate support for an extranet and it can also
  be costly
• Human Factors
• The technology is different than many info
  systems that directors
• may be used to and therefore they might require
  additional training.
• Employees who are regular users on the sight
  might also require
• additional training.

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Disadvantages

• Equipment Needed
• The types of hardware and software used is
  extranets also varies
• between companies. This equipment may also have
  high initial
• costs which many some companies do not have the
  capital to
• implement them,
• Slow Links
• The speed of an extranet is an issue because the
  net is usually only
• as fast as its weakest link. Videoconferencing
  is also very slow.
• Complexity
• Extranets are far more complicated to establish
  than intranets. One
• reason is because is that it is difficult to make
  a system interact
• efficiently with other systems from other
  companies.

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Disadvantages

• Legitimacy
• Many people also question the legitimacy of
  information
• exchanged through extranets. The traditional
  face-to-face business
• relationship does not happen so when a company
  attempts to sell
• supplies to a vendor, it does not always know
  that a bid that a
• vendor has offered is legitimate.
• Elimination Of Distribution
• Eliminating of distributors may result in
  significant channel
• distribution as a result of channel conflict
  between companies.

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Recommendation

• When deciding weather or not to use an extranet
  it is
• important that a company examine the decision
  thoroughly.
• We have made that the following reccomendations
  as to
• decide if an extranet is the best idea and if so,
  how to
• implement it.
• Define Why Extranet is being implemented and how
  you
• will use it
• Some companies have much more to gain than
  others by using an
• extranet. We have to decide how many of our
  suppliers we want to
• give access to our extranet. The more there is,
  the more sense an
• extranet makes. This is because it will save move
  money and
• make is easier to communicate with other
  companies.

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Recommendation

• 2)Consider your business partners and how theyll
  benefit
• The degree of collaboration between partners will
  ultimately
• determine the success of the extranet. This means
  that partners
• must also perceive a benefit to using it.
• 3) Consider Privacy and Security
• What kind of data will you be displaying. How
  sensitive is it?
• 4) Develop A Clear Plan That Includes
• -business problems to be addressed
• -inventory of existing computer and communication
  devices
• -cost of design, installation and implementation.
  Also, where are
• you going to get the people who are going to do
  this.

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Leverage and Risks

• The leverage of extranets is that offer lower
  overhead costs, a
• more inefficient supply chain, better inventory
  management.
• Another benefit of extranets is that it makes
  communication
• between employees much easier. Employees can
  communicate
• ideas without having to leave their desks.
• The risks of using an extranet are security and
  privacy. Security is
• an issue because a system that runs over the
  internet is very
• vulnerable to invasions. No one has been able to
  come up with a
• foolproof security plan. Privacy is a risk
  because companies has to
• hire trust worthy people when it comes to the
  handling of sensitive
• information. If this information becomes
  publicized it can have
• very damaging effects on a company.

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GOOD LUCK ON YOUR FINAL EXAM!